Examining Las Vegas Sands Corp, Boyd Gaming Corp, and Wynn Resorts Limited for Opportunities

01/06/2009 10:56 am EST


Nick Perry

Equity Options Trader, Schaeffer's Investment Research

One of our scans today highlighted some activity in Las Vegas Sands Corp (LVS). The stock was up roughly 20% on Friday, and it looks like the buying is continuing today as the shares gain 17%. Digging into the action shows that fellow gambling stocks Boyd Gaming Corp (BYD) and Wynn Resorts Limited (WYNN) are also on the move. Here is a look at the recent action:

Las Vegas Sands Corp

Wynn Resorts Limited

Boyd Gaming Corp

Price Charts Courtesy of Thomson Financial

Here we have the intraday charts for the last five days. Based on this, it appears that the buying is part of a near-term trend. Of course, these stocks have been hit hard in the last year. Shares of LVS have lost more than 90% over the last 52 weeks. Boyd Gaming held up only slightly better with a loss of 83%, while Wynn Resorts dropped 55%. That may help to explain the apathy seen in the analyst ratings data.

A point highlighted in the scan post this morning is that Las Vegas Sands Corp is heavily shorted. That distinction also applies to both Boyd Gaming and Wynn Resorts. According to data collected by our Quantified Analysis group, 17% of BYD's float is sold short, 24% of LVS's float is sold short, and 32% of WYNN's float is sold short.

Given the precipitous drop seen in the past year, it is obvious that the short sellers were on the mark. However, at some point I wonder whether they will look to roll out of those positions as they look to other sectors. That could add near-term buying demand. Meanwhile, I would view analyst ratings as something that will take longer to play out. In other words, I wouldn't expect to see a rush of upgrades. However, this data is worth pointing out as something to keep in mind down the road. If these companies can find their footing and begin to show signs of a turnaround, analysts could eventually look to offer upgrades.

By Nick Perry of Schaeffer’s Trading Floor Blog

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